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RadioShack is headed to bankruptcy court again. The chain’s owner, General Wireless Operations, filed for Chapter 11 yesterday after having previously announced it was in the process of closing 200 of its 1,500 stores.
Dene Rogers, the former CEO of Target Australia and Sears Canada, who took over as CEO of RadioShack last May with plans to reinvent its business model, said the company was making progress, but more was needed.
“In 2016, we reduced operating expenses by 23 percent, while at the same time [we] saw gross profit dollars increase eight percent,” said Mr. Rogers.
“For a number of reasons, most notably the surprisingly poor performance of mobility sales, especially over recent months, we have concluded that the Chapter 11 process represents the best path forward for the company,” he said. “We will continue to work with our advisors and stakeholders to preserve as many jobs as possible while maximizing value for our creditors.”
Mobility sales at RadioShack were under the control of Sprint, which partnered with General Wireless to keep about 40 percent of the chain’s stores open following its previous trip to bankruptcy court in 2015.
Sprint, according to a Wall Street Journal report, has reached a deal with General Wireless to end the partnership between the two. Sprint will pay $17 million and convert “several hundred” Sprint/RadioShack stores to Sprint corporate locations to unravel the deal.
RadioShack, according to a company press release, is “currently exploring all available strategic alternatives to maximize value for creditors, including the possibility of keeping stores open on an ongoing basis.”
- General Wireless Operations Inc. Commences Voluntary Chapter 11 Proceeding – RadioShack
- RadioShack Files for Bankruptcy Protection, Again – The Wall Street Journal
- RadioShack Successor Enters Bankruptcy as Retail Woes Mount – Bloomberg
- Electronics store RadioShack files for bankruptcy again – Reuters
- New RadioShack CEO promises to reinvent business model – RetailWire